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IMF Expects Sri Lanka to Reach Deal with Commercial Creditors, Notes Positive Macroeconomic Reforms

April 06, Colombo (LNW):The International Monetary Fund (IMF) has expressed optimism regarding Sri Lanka’s ongoing negotiations with its commercial creditors, stating a “strong expectation” for a deal to be reached by the completion of the IMF’s second review.

IMF Communications Director Julie Kozack highlighted that domestic debt operations in Sri Lanka have been largely completed, indicating progress in negotiations. She emphasized the importance of reaching agreements with commercial creditors consistent with program parameters by the conclusion of the second review.

Speaking at a press conference held at the IMF headquarters in Washington, Kozack conveyed confidence in the negotiation process, noting that the next steps in debt restructuring involve concluding negotiations with external commercial creditors and implementing agreements with official creditors.

Kozack also commended Sri Lanka’s macroeconomic policy reforms, citing rapid disinflation, robust reserve accumulation, and initial signs of economic growth while maintaining financial system stability. She underscored the strengthening of public finances following substantial fiscal reforms, urging continued momentum in reform efforts.

Furthermore, Kozack mentioned that the IMF’s Executive Board approved the first review of Sri Lanka’s program, enabling a disbursement of US$337 million on December 12, 2023. This approval signifies the IMF’s support for Sri Lanka’s economic reform agenda and underscores the importance of continued collaboration to achieve fiscal sustainability and economic stability.

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